Stanchart gobbles most RBZ forex

STANDARD Chartered Bank of Zimbabwe Ltd (Stanchart) has so far snapped up more than US$43,7 million from the Reserve Bank of Zimbabwe’s foreign currency auction system, t
aking up 15,4% of the total proportion allotted worth US$282,9 million.

The figures, released last Friday, are for the period ending May 27.

Its rival, Barclays Bank of Zimbabwe Ltd (Barclays) which has received $30,6 million, constituting 10,8% of the RBZ foreign currency offered, closely follows.

Barclays and Stanchart are the country’s largest commercial banks.

Their head offices are in the United Kingdom.

The two international banks have however begun scaling down their Zimbabwe operations, citing the country’s poor macro-economic fundamentals.

The Jewel Bank of Zimbabwe Ltd has received the most foreign currency from RBZ coffers as far as locally-owned banks are concerned.

The bank has received US$29,6 million, which is 10,5% of the bids allotted by the central bank.

Bankers have accused the RBZ governor of allocating the Jewel Bank more foreign currency than the others because it is his former bank and the chief source of government funds.

Several government ministers and political heavyweights bank with the Jewel Bank.

“There is no favouritism at all,” Gono told businesdigest in an interview last Friday. “Banks make their bids and we just allocate what they bid for. We however reject bids for such items as holiday allowances, which are not a priority at the moment. To date there is no evidence of a dominant bank or authorised dealer.”

Of the top three, Stanchart were allocated 1 837 bids, Barclays 1 499 and the Jewel Bank 714.

CFX however made the third largest number of bids after Stanchart and Barclays with 1 095 bids. The bids amounted to US$21,3 million, which was 7,5% of the total proportion.

The RBZ had the least allotted bids with only two amounting to US$17 808.

The rest of the banks have market shares ranging between 0% and 7,7%.

“To date there is no evidence of a dominant bank or authorised dealer,” Gono said.

The weighted average auction rate remained unchanged at the weighted auction rate of $5 330,24 for each United States dollar in Auction 38, which was the last one held when the figures were compiled.

This compares with the weighted average auction rate of $5 331,79 per US dollar in the previous auction.

“The total amount of bids accepted before prioritisation of the productive sectors in Auction 38 remained unchanged at the previous auction level of US$18,6 million,” Gono said. “The total amount of bids received outstripped the amount on offer at US$8,5 million by US$10,1 million.”

He said generally the Zimbabwe dollar continued to depreciate against the US dollar.

“During the week under review, the Zimbabwe dollar remained stable at the auction rate of around $5 331,79 per US dollar,” Gono said. “Thus, the Zimbabwe dollar appreciated by a narrow margin of $1,55 to a weighted average auction rate of $5 330,24 per US dollar, the current auction rate.”

However, he said the Zimbabwe dollar appreciated by between 0,1% and 1,9% against other major currencies.

Gono said since the introduction of the auction system on January 12, a total of 12 380 bids valued at US$282,9 million were allotted at the auction, against the total amount of bids accepted of US$389,5 million after prioritisation of the productive sectors of the economy.

“This implies a success rate of the auction of 72,6% since its inception,” he said.

Gono said demand for foreign exchange surpassed the total amount on offer by US$4,2 million, resulting in 442 bids being rejected.

“As to be expected in an auction system, not all bids submitted are awarded,” he said. “Some bids are therefore rejected. A cumulative total of 5 747 bids valued at US$114,7 million were accepted but not subsequently allotted since the introduction of the auction.”

He said a total of US$282,9 million was allotted through authorised dealers since the introduction of the auction system on January 12.

The RBZ’s foreign currency auction system was mooted by the Confederation of Zimbabwe Industries headed by industrialist Antony Mandiwanza.

The CZI is however saying the system is not benefiting industrialists because most of their bids are being thrown out.

Gono told businessdigest that the problem with the industrialists was that they tend to forget that they are not the only ones who need foreign currency.

Zimbabwe Revenue Authority (Zimra) director general Gershom Pasi has described the auction system as “a road map towards full economic recovery”.

“We should run one economy and not several economies,” he said referring to the once lucrative parallel market. “We should be working together as it will benefit all of us.”

Zimra has changed its import and export regulations for vehicles.

Importers now have to pay customs duty for their vehicles using prevailing rates from the auction as opposed to the $824:US$1 that was being used previously. Effectively this means that motor vehicle prices for imported vehicles have increased dramatically – in some cases doubling.

The central bank’s move to throw out holiday travel allowances has riled some business community bosses especially chief executive officers that have clauses in their contracts allowing them to utilise the company’s foreign currency for holidaying as part of their huge perks.

The bosses contend that it is their democratic right to go on holiday using foreign currency allowances allocated to them by their firms, some of whom are major exporters and have branches in Europe and the US.

“I make no apology for removing and rejecting so many bids,” Gono said.

“One cannot allow US$2 500 to be used for holidays every year even during mid-year. This can be done when the foreign currency situation gets back to normal levels.”

He said the bias of allocation was towards the productive sector.

Gono said bias was also given for educational purposes, freight, drugs, equipment and machinery, raw materials, spares, chemicals, fuel and fees and subscriptions.

He said bids below the lowest acceptable rates were “rejected in all cases”.